AT&T's Project VIP buoys its FTTB reach with 1M business locations added

AT&T (NYSE: T) has completed the buildout of fiber to 1 million additional business customer locations thanks to the fiber-to-the-building (FTTB) program that is part of its Project VIP initiative.

Since it began the FTTB program in 2012, the service provider extended its fiber network by an additional 76,000 route miles, bringing its total to almost 500,000.

This expansion has enabled it to bring a mix of symmetrical and asymmetrical speeds ranging from 25 Mbps to 300 Mbps, with plans to reach 1 Gbps.

In 2014, the service provider began offering up to 300 Mbps with plans to offer up to 1 Gbps in its FTTB-enabled buildings as part of its Business Fiber service line. Eligible customers can also choose from a mix of symmetric and asymmetric speeds that go as low as 25 Mbps.

Additionally, AT&T offers various speeds through its dedicated access products such as Ethernet, VPN and managed Internet. The Dedicated Ethernet service is available in speeds that can scale up to 100 Gbps. 

AT&T offers competitive pricing for the FTTB speeds for SMB customers. The 25 Mbps asymmetric tier is priced as low as $70 per month, for example.

While it won't release its fourth quarter 2015 earnings until Jan. 26, AT&T saw the fruits of the FTTB rollout pay off in the third quarter, reporting that business revenues rose 1.2 percent year over year to $17.7 billion. Strategic business services, including its VPN, Ethernet, cloud, hosting, IP conferencing, VoIP, MIS over Ethernet, U-verse and security services, rose 12.6 percent to $2.8 billion. Total wireline data rose for the fourth consecutive quarter and now makes up 59 percent of total business wireline revenues.

One of those businesses that benefited from the fiber-based speeds is Primary Care Associates, a healthcare provider in Ohio.

"We simply did not have the bandwidth needed to transition to electronic medical records," said Denise Donofrio, practice manager at Primary Care Associates, in a release.

But speed is only one part of the FTTB equation.

Perhaps not surprisingly, the service provider is seeing the ongoing fiber rollout drive more managed services growth, particularly with small to medium business (SMB) customers.

John Stephens, CFO of AT&T, told investors in December that the fiber rollout is giving SMBs the ability to get services like cloud and VPN, which have typically been only available to larger business customers.

"We have seen a change in the trends of our small business revenues and it's directly tied to the fiber we put in place, but also the ability to take our strategic services and push them down market because of the fiber," Stephens said.

For more:
- see the release

Related articles:
AT&T says more building owners are preparing buildings for fiber deployments
AT&T's Hughes on FTTB: We're making steady progress
AT&T's Stephens: Fiber rollout is driving uptick in SMB managed services sales
AT&T says it needs to invest in FTTP where it makes economic sense

This article was updated on Jan. 21 to reflect that AT&T's 25 Mbps Business Fiber offering is priced at $70 a month.